. . I 

. . i 

< 

WlEL WILfsON 

A-l-roRNEY CazNERAL August 21, 195% 

Honorable Burney Walker. Opinion No. WW-687 

Criminal District Attorney 

McLennan County Re: Proper method of taxing 

Waco, Texas bank stock under submitted facts. 

Dear Mr. Walker: 

You have requested, that we ad.vise you on the 

following question: 

*If a national bank does not include the 

market value of its real estate In ascertaining 

the value of the assets of said bank for purposes of the annual statement of assets, should 

they be allowed to deduct the assessed value of 

said real estate from the assets when arriving 

at the value of the bank stock for determining 

tax liabllity~?" 

In City of Abilene v/Meek, 311 S.W.2d 654 (Tex.Clv. 

App. 1958, .error.ref: ,; the court wasconcerned with the 

meaning of Article 71 6, Vernonl~s Civil Statutes, which reads 

In part as:follows: 

"Every banking corporation, State or national, 

doing business In this State shall, in the city 

or town in which it Is located, render its real 

estate to the tax assessor at the time and In the 

manner requlred~of individuals. At the time of 

making such rendition the .presldent or some other 

officer of said bank shall file with said assessor a sworn statement showing the number and 

amount of the shares of said bank, the name and 

resld,ence of each shareholder, and the number and 

amount of shares owned by him. Every shareholder 

of said bank shall, In the city or town where 

said bank is located, render at their actual value 

to the tax assessor all ahares owned by him in 

Such bank; and in case of his failure so to do, 

the assessor shall assess such unrendered shares 

as other unrendered property. Each share In such 

bank shall be taxed only for the difference between Its actual cash value and the proportionate 

amount per snare at which its real estate 1s 
. . 

Honorable EUrney Walker, Page 2 (OpiMon 30. WW687) 

assessed. Nothing herein shall 

be so const&& ‘as to tax national or State 

banks, or the Ehareholders thereof, at a 

greater rate than is assessed against other 

moneyed capital In the hands of individuals.” 

(Emphasls supplied.) 

The court stated, that the statute was plain and 

unambiguous and that each share should be taxed only, for the 

difference between Its actual cash value and the proportionate amount per share at which Its real estate was assessed. 

In determining the value of the real estate, the city was 

required to accept its own assessed value thereof rather than 

the value as shown in the statement of the condition of the 

bank filed with the Comptroller. 

In Opinion No. WW-439. this office held that In 

determining the value of bank stock the assessment should be 

based upon the fair cash market value of the stock rather 

than the value that would be obtained by adding the value of 

the capital stock, t~he amount of surplus, undivided profits 

or reserve funds and dividing this by the number of shares 

of stock. Articles 7149 and 7174, V.C.S., deal with ,valuation and read, respectively, in part as follows: 

. . . ., 

” 1 Value. I --the:,term, ‘true and full value,’ 

wherever ,’ used shall be held to mean the fair 

market value, in cash, at the place where the 

property to which the term is applied shall 

be at the time of assessment, being the price 

which could be obtained therefor at private 

sale, and not at forced or auction sale.” 

1, . . . 

“In determining the true and full value of real 

and personal property the assessor shall not 

ad,opt a lower or different standard of value 

because the same is to serve is a basis of taxation, nor shall he adopt as a criterion of 

value the price for which such property would 

sell at auction or a forced sale or in the aggregate with all the property, In his county; but 

he shall value each tract or lot by Itself, and 

at such sum and price as he believes the same to 

be fairly worth in money at the time such assessment Is made.” 
. . 

. 

5 

Honorable Gurney Walker, Page 3 (Opinion No. ~~-687) 

It has been held that there is no substantial 

difference in the terms (1) market value, (2) fair market 

value, (3) cash market value, (4) fair cash market value 

and (5) reasonable cash market value as these terms are 

used in the various constitutional and statutory provisions 

pertaining to value for the assessment of taxes, -West 

Texas Hotel Co. v. City of El Paso, 83 S;W.2d 772 (Tex.Clv. 

App. 1335, error dism.). 

Section 20 of Article VIII of the Texas Constitution contemplates that all property in a county may be 

assessed at 100% of its fair cash market value; it has been 

uniformly held by the courts that a lesser percentage may 

be used where such percentage is uniformly applied to all 

property, both real and personal. This for the reason that 

the equality and uniformity of taxation required by Section 

1 of Article VIII of the Constitution has been satisfied. 

City of El Paso et al v. Howze, 248 S.W. 99 (Tex.Civ.App. 

1923, e-Clark, 158 S.W.2d (Tex. 

Civ.App. 1942, error=, w.0.m.). 

565 

You are therefore advised that the assessment of 

the tax on the bank stock should be based upon the actual 

cash value of such stock less the proportionate amount per 

share of the actual cash value of the real estate owned by 

the bank. If an evaiuation of less than .lOO$ is used for 

some of the property within the county, it must be equally 

and uniformly applied to ~a11 taxpayers and property within 

the county. *, 

SUMMARY 

The assessment for ad valorera tax' 

purposes of bank stock should be based 

upon the actual cash value of such stock 

less the proportionate amount per share 

of the actual cash value of the real 

estate owned b.? the bank. If an svaluation of less than 100% is~ uned~ for some 

of the property~ within the county~, it 

must be equally and uniformly applied to 

all taxpayers and property within the 

county. 

Very truly yours, 

WILL WILSON 

Attorney General 
Honorable Burney Walker, Page 4 (Opinion No. ~~-687) 

MMP:bct 

APPROVED: 

OPINION COMMITTEE: 

Geo. P. Blackburn, Chairman 

C. K. Richards 

J. Arthur Sandlln 

Howard Mays 

REVIEWED FOR THE ATTORNEY GENERAL 

By: W. V. Geppert